Which of the following is a characteristic of manufacturing overhead in a job order cost system?
A)It is directly traceable to specific jobs or units.
B)It includes the cost of all labor relating to manufacturing operations.
C)It is assigned to units produced by means of an overhead application rate.
D)It includes the cost of direct materials used and of indirect labor.

Question

Quizplus · Accepted Answer

Manufacturing overhead in a job order cost system is not directly traceable to specific jobs or units, and it does not include the cost of all labor relating to manufacturing operations. Instead, it includes indirect costs such as rent, utilities, and depreciation on factory equipment. These costs are assigned to units produced by means of an overhead application rate, which is calculated based on estimated overhead costs and a chosen allocation base (such as direct labor hours or machine hours).

Which of the Following Is a Characteristic of Manufacturing Overhead